A project Report on

“LOGISTICS AND SUPPLY CHAIN MANAGEMENT OF AMUL MILK”

Submitted by

N.SANJAY KUMAR

CONTENTS

INTRODUCTION AND HISTORY

FMCG PRODUCTS

INDIAN FMCG SECTOR

COMPANY’S PROFILE- An Overview

HCMMF: An Overview

STRUCTURE OF AMUL

HCMMF VALUE CHAIN

AMUL PATTERN

SUPPLY CHAIN OF AMUL POUCH MILK:

MARKET RESEARCH

DISTRIBUTERS SURVEY ANALYSIS ON AMUL POUCH MILK

RETAILER SURVEY ANALYSIS ON AMUL POUCH MILK

CUSTOMERS SURVEY ANALYSIS ON AMUL POUCH MILK

MAJOR FINDINGS RELATED TO:

PLANT

DISTRIBUTERS

RETAILERS

CUSTOMERS

SUGGESTIONS AND FEEDBACK

QUESTIONNAIRE

BIBLIOGRAPHY

INTRODUCTION AND HISTORY

The Kaira District Cooperative Milk Producers’ Union Limited was established on December 14, 1946 as a response to exploitation of marginal milk producers in the city of Anand (in Kaira district of the western state of Gujarat in India) by traders or agents of existing dairies.

Producers had to travel long distances to deliver milk to the only dairy, the Polson Dairy in Anand – often milk went sour, especially in the summer season, as producers had to physically carry in individual containers. These agents decided the prices and the off-take from the farmers by the season.

Milk is a commodity that has to be collected twice a day from each cow/buffalo. In winter, the producer was either left with surplus unsold milk or had to sell it at very low prices. Moreover, the government at that time had given monopoly rights to Polson Dairy (around that time Polson was the most well known butter brand in the country) to collect milk from Anand and supply to Bombay city in turn(about 400 kilometers away).

India ranked nowhere amongst milk producing countries in the world in 1946. The producers of Kaira district took advice of the nationalist leaders, Sardar Vallabhbhai Patel (who later became the first Home Minister of free India) and Morarji Desai (who later become the Prime Minister of India). They advised the farmers to form a Cooperative and supply directly to the Bombay Milk Scheme instead of selling it to Polson (who did the same but gave low prices to the producers). Thus the Kaira District Cooperative was established to collect and process milk in the district of Kaira.

At the initial stage only 250 litres of milk was collected every day . But with the growing awareness of the benefits of the cooperatives, the collection of milk increased. Today AMUL Collects 8.4 millon litres per day.

Since milk was a perishable commodity it becomes difficult to preserve milk flora for a longer period. Besides when the milk was to be collected from the far places,there was a fear of spoiling the milk. To overcome this problem the union thought to develop the chilling units at various junctions, which would collect the milk and cool chill it , so as to preserve it for a longer period.

Village level cooperatives were established to organize the marginal milk producers in each of these villages. The first modern dairy of the Kaira Union was established at Anand (which popularly came to be known as AMUL dairy after its brand name). Indigenous R&D and technology development at the Cooperative had led to the successful production of skimmed milk powder from buffalo milk– the first time on a commercial scale anywhere in the world. The foundations of a modern dairy industry in India had just been laid as India had one of the largest buffalo populations in the world. We move to year 2000.

The dairy industry in India and particularly in the State of Gujarat looks very different. India for one has emerged as the largest milk producing country in the world .Gujarat emerges as the most successful State in terms of milk and milk product production through its cooperative dairy movement. The Kaira District Cooperative Milk Producers’ Union Limited, Anand becomes the focal point of dairy development in the entire region and AMUL emerges as one of the most recognized brands in India, ahead of many international brands.

PHOTOGRAPH OF BHUMI PUJAN OF AMUL

Looking back on the path traversed by Amul, the following features make it a pattern and model for

emulation elsewhere.

AMUL has been able to:

1. Produce an appropriate blend of the policy makers farmers board of management and the professionals

2. Bring at the command of the rural milk producers the best of the technology and harness its fruit for

betterment.

3. Provide a support system to the milk producers without disturbing their agro- economic systems,

4. Plough back the profits, by prudent use of men, material and machines, in the rural sector for the

common good and betterment of the member producers

5. Even though, growing with time and on scale, it has remained with the smallest producer members. In

that sense. Amul is an example par excellence, of an intervention for rural change. The Union looks after policy formulation, processing and marketing of milk, provision of technical

inputs to enhance milk yield of animals, the artificial insemination service, veterinary care, better feeds and

the like – all through the village societies. Basically the union and cooperation of people brought Amul into

fame i.e.AM UL a name which suggests THE TASTE OF INDIA.

FMCG PRODUCTS

Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG).

FMCG products are those that get replaced within a year. Examples of FMCG generally include a wide range of

frequently purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning products, shaving

products and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products, and

plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged food products, soft drinks,

tissue paper, and chocolate bar

INDIAN FMCG SECTOR

The Indian FMCG sector is the fourth largest in the economy and has a market size of US$13.1 billion.

Well-established distribution networks, as well as intense competition between the organised and

unorganised segments are the characteristics of this sector. FMCG in India has a strong and competitive

MNC presence across the entire value chain. It has been predicted that the FMCG market will reach to US$

33.4 billion in 2015 from US $ billion 11.6 in 2003.

The middle class and the rural segments of the Indian population are the most promising market for

FMCG, and give brand makers the opportunity to convert them to branded products. Most of the product

categories like jams, toothpaste, skin care, shampoos, etc, in India, have low per capita consumption as

well as low penetration level, but the potential for growth is huge.

The Indian Economy is surging ahead by leaps and bounds, keeping pace with rapid urbanization,

increased literacy levels, and rising per capita income.

THE TOP 10 COMPANIES IN FMCG SECTOR

S. NO. Companies1. Hindustan Unilever Ltd.2. ITC (Indian Tobacco Company)3. Nestlé India4. HCMMF (AMUL)5. Dabur India6. Asian Paints (India)7. Cadbury India8. Britannia Industries9. Procter & Gamble Hygiene and

Health Care10. Marico Industries

NETWORK ADOPTION MODEL BY AMUL FOR ITS SUCCESS

It is interesting to note that AMUL has adopted the network model in early 1950s in a broader context and more complex environment, well before the approach was recognized in Western Europe and North America. In the following sections we describe the AMUL story and elaborate on its practices.

Every day Amul collects 8.4 millon litres of milk from 2.6 million farmers (many illiterate), converts the milk into

branded, packaged products, and delivers goods worth Rs 8crore (Rs 80 million) to over 12 millon retail outlets

across India .Its supply chain is easily one of the most complicated in the world.

Its motto is never forget your customer.

If you don't, success is certain. The proof? A unique, Rs 8,000crore (Rs 80 billion) enterprise.

Organisation structure

It all started in December 1946 with a group of farmers keen to free themselves from intermediaries, gain access to

markets and thereby ensure maximum returns for their efforts.Based in the village of Anand, the Kaira District Milk

Cooperative Union (better known as Amul) expanded exponentially. It joined hands with other milk cooperatives,

and the Gujarat network now covers 2.12 million farmers, 10,411 village level milk collection centers and fourteen

district level plants (unions) under the overall supervision of GCMMF.

Markets are primitive and poor in infrastructure. Amul and GCMMF acknowledged that development and growth

could not be left to market forces and that proactive intervention was required.

Two key requirements were identified.

1. The first, that sustained growth for the long term would depend on matching supply and demand. It would

need heavy investment in the simultaneous development of suppliers and consumers.

2. Second, that effective management of the network and commercial viability would require professional

managers and technocrats.

To implement their vision while retaining their focus on farmers, a hierarchical network of cooperatives was

developed, which today forms the robust supply chain behind GCMMF's endeavors. The vast and complex

supply chain stretches from small suppliers to large fragmented markets. Management of this network is

made more complex by the fact that GCMMF is directly responsible only for a small part of the chain, with a

number of third party players (distributors, retailers and logistics support providers) playing large roles.

Managing this supply chain efficiently is critical as GCMMF's competitive position is driven by low consumer

prices supported by a low cost system.

Introducing higher value products

Beginning with liquid milk, GCMMF enhanced the product mix through the progressive addition of higher

value products while maintaining the desired growth in existing products

. Despite competition in the high value dairy product segments from firms such as Hindustan Lever, Nestle and

Britannia, GCMMF ensures that the product mix and the sequence in which Amul introduces its products is

consistent with the core philosophy of providing milk at a basic, affordable price.

Managing the supply chain

Even though the cooperative was formed to bring together farmers, it was recognised that professional

managers and technocrats would be required to manage the network effectively and make it commercially

viable.

Establishing best practices

A key source of competitive advantage has been the enterprise's ability to continuously implement best

practices across all elements of the network: the federation, the unions, the village societies and the

distribution channel. In developing these practices, the federation and the unions have adapted successful

models from around the world. It could be the implementation of small group activities or quality circles at the

federation. O

Technology and e-initiatives

HCMMF's technology strategy is characterized by four distinct components: new products, process

technology, and complementary assets to enhance milk production and e-commerce. Few dairies of the world

have the wide variety of products produced by the GCMMF network. Village societies are encouraged through

subsidies to install chilling units. Automation in processing and packaging areas is common, as is HACCP

certification. Amul actively pursues developments in embryo transfer and cattle breeding in order to improve

cattle quality and increases in milk yields.

HCMMF was one of the first FMCG (fast-moving consumer goods) firms in India to employ Internet

technologies

Today customers can order a variety of products through the Internet and be assured of timely delivery with

cash payment upon receipt. Another e-initiative underway is to provide farmers access to information relating

to markets, technology and best practices in the dairy industry through net enabled kiosks in the villages.

HCMMF has also implemented a Geographical Information System (GIS) at both ends of the supply chain, i.e.

milk collection as well as the marketing process.Farmers now have better access to information on the output

as well as support services while providing a better planning tool to marketing personnel.

HYDERABAD Cooperative Milk Marketing Federation

HCMMF: An Overview

. Distribution Network of HCMMF:

Most producers work with marketing intermediaries to bring their products to market. The marketing

intermediaries make up a marketing channel also called distribution cannel. Distribution channels are sets of

interdependent organizations involved in the process of making a product or service available for use or

consumption.

The Head Office of HCMMF is located at Anand. The entire market is divided in 5 zones. The zonal offices are

located at Ahmedabad, Mumbai, New Delhi, Kolkata and Chennai. Moreover there are 49 Depots located across the

country and HCMMF caters to 13 Export markets.

HYDERBAD Cooperative Milk Marketing Federation (HCMMF) is India's largest food products marketing

organisation. It is a state level apex body of milk cooperatives in Gujarat which aims to provide remunerative

returns to the farmers and also serve the interest of consumers by providing quality products which are good value

for money.

CRISIL, India's leading Ratings, Research, Risk and Policy Advisory company, has assigned its highest ratings of

"AAA/Stable/P1+" to the various bank facilities of GCMMF.

Members: 13 district cooperative milk producers' Union

No. of Producer Members: 2.79 million

No. of Village Societies: 13,328

Total Milk handling capacity: 11.22 million litres per day

Milk collection (Total - 2008-09): 3.05 billion litres

Milk collection (Daily Average 2008-09): 8.4 million litres

Milk Drying Capacity: 626 Mts. per day

Cattlefeed manufacturing Capacity: 3500 Mts per day

Sales Turnover Rs (million) US $ (in million)

1994-95 11140 355

1995-96 13790 400

1996-97 15540 450

1997-98 18840 455

1998-99 22192 493

1999-00 22185 493

2000-01 22588 500

2001-02 23365 500

2002-03 27457 575

2003-04 28941 616

2004-05 29225 672

2005-06 37736 850

2006-07 42778 1050

2007-08 52554 1325

2008-09 67113 1504

LIST OF PRODUCTS MARKETED

Breadspreads:

Amul Butter Amul Lite Low Fat Breadspread Amul Cooking Butter

Cheese Range:

Amul Pasteurized Processed Cheddar Cheese Amul Processed Cheese Spread Amul Pizza (Mozarella) Cheese Amul Shredded Pizza Cheese Amul Emmental Cheese Amul Gouda Cheese Amul Malai Paneer (cottage cheese) Utterly Delicious Pizza

Mithaee Range (Ethnic sweets):

Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom) Amul Amrakhand Amul Mithaee Gulabjamuns Amul Mithaee Gulabjamun Mix Amul Mithaee Kulfi Mix Avsar Ladoos

UHT Milk Range:

Amul Shakti 3% fat Milk Amul Taaza 1.5% fat Milk Amul Gold 4.5% fat Milk Amul Lite Slim-n-Trim Milk 0% fat milk Amul Shakti Toned Milk Amul Fresh Cream Amul Snowcap Softy Mix

Pure Ghee:

Amul Pure Ghee Sagar Pure Ghee Amul Cow Ghee

Infant Milk Range:

Amul Infant Milk Formula 1 (0-6 months) Amul Infant Milk Formula 2 ( 6 months above) Amulspray Infant Milk Food

Milk Powders:

Amul Full Cream Milk Powder Amulya Dairy Whitener Sagar Skimmed Milk Powder Sagar Tea and Coffee Whitener

Sweetened Condensed Milk:

Amul Mithaimate Sweetened Condensed Milk

Fresh Milk:

Amul Taaza Toned Milk 3% fat Amul Gold Full Cream Milk 6% fat Amul Shakti Standardised Milk 4.5% fat Amul Slim & Trim Double Toned Milk 1.5% fat Amul Saathi Skimmed Milk 0% fat Amul Cow Milk

Curd Products:

Yogi Sweetened Flavoured Dahi (Dessert) Amul Masti Dahi (fresh curd) Amul Masti Spiced Butter Milk Amul Lassee

Amul Icecreams:

Royal Treat Range (Butterscotch, Rajbhog, Malai Kulfi) Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit Bonanza, Roasted Almond) Nature's Treat (Alphanso Mango, Fresh Litchi, Shahi Anjir, Fresh Strawberry, Black Currant, Santra Mantra,

Fresh Pineapple) Sundae Range (Mango, Black Currant, Sundae Magic, Double Sundae) Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies, Tricone, Chococrunch, Megabite, Cassatta) Utterly Delicious (Vanila, Strawberry, Chocolate, Chocochips, Cake Magic)

Chocolate & Confectionery:

Amul Milk Chocolate Amul Fruit & Nut Chocolate

Brown Beverage:

Nutramul Malted Milk Food

Milk Drink:

Amul Kool Flavoured Milk (Mango, Strawberry, Saffron, Cardamom, Rose, Chocolate) Amul Kool Cafe Amul Kool Koko Amul Kool Millk Shaake (Mango, Strawberry, Badam, Banana)

Health Beverage:

Amul Shakti White Milk Food

Achievements of HCMMF

2.8 million milk producer member families

13,759 village societies

13 District Unions

8.5 million liters of milk procured per day

Rs. 150 million disbursed in cash daily

HCMMF is the largest cooperative business of small producers with an annual turnover of Rs. 53 billion

The Govt. of India has honoured Amul with the “Best of all categories Rajiv Gandhi National Quality

Award”.

Largest milk handling capacity in Asia

Largest Cold Chain Network

48 Sales offices, 3000 Wholesale Distributors, 5 lakh retail outlets

Export to 37 countries worth Rs. 150 crores

Winner of APEDA award for nine consecutive years

HCMMF (AMUL) has the largest distribution network for any FMCG company. It has nearly 50 sales offices spread

all over the country, more than 3,000 wholesale dealers and more than 5,00,000 retailers.

EXPORTS OF AMUL

HCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading House" status. HCMMF has received the APEDA Award from Government of India for Excellence in Dairy Product Exports for the last 11 years.

The major export products are:

Consumer Packs

Amul Pure Ghee Amul Butter Amul Shrikhand Amul Mithaee Gulabjamun Nutramul Brown Beverage Amul Cheese Amul Malai Paneer

Amul UHT Milk (Long Life) Amul Gold Milk Amul Taaza Double Toned Milk Amul Lite Slim and Trim Milk

Amul Fresh Cream

Bulk Packs

Amul Skimmed Milk Powder Amul Full Cream Milk Powder

Many of our products are now available in the USA, Gulf Countries and Singapore

Amulya have made Amul a leading food brand in India. (Turnover: Rs. 80 billion in 2009-10). Today Amul is a symbol of many things.

Of high-quality products sold at reasonable prices.

Of the genesis of a vast co-operative network.

Of the triumph of indigenous technology.

Of the marketing savvy of a farmers' organisation.

And of a proven model for dairy development.

STRUCTURE OF AMUL

2.79 millon milking farmers

13000 village co-operaive societies

13 District Co-operative Milk producers Union+1 Mother dairy

Amul Dairy ,Anand

Dudhsagar Dairy,Mehsana

Sabar Dairy,Himmatnagar

Banas Dairy,Palanpur

Baroda Dairy,Baroda

Sumul Dairy,Surat

Panchamrut dairy,Godhra

Uttam Dairy, Ahmedabad

Rajkot Dairy, Rajkot

Vasudhara Dairy, Valsad

Dudhdhara Dairy, Bharuch

Gandhinagar Dairy, Gandinagar

Cheese Plant, Khatraj

Vidya Dairy, Anand

Poly film plant, Gandhinagar

Mother Dairy , Gandhinagar

HCMMF LTD.(State level apex body –HYDERBAD Co-operative milk marketing Federation)

Plants of Amul in Delhi/NCR region

1.Manesar plant(Gurgaon)- 10 lakh litres per day

2.Goga plant(Baghpath, U.P)-3 lakh litres per day

3.Kwality plant(Palwal)- 3 lakh litres per day

4.Nagar dairy(Hapur)-3.75 lakh litres per day

Nagar dairy has 150 distributers in NCR region and 60 distributers in Noida and Ghaziabad region

HCMMF VALUE CHAIN :

1. Production of milk 2. Milk collection 3. Milk processing

4.HCMMF(Marketing)

5.Distribution 6.Retailing 7.customers

The above figure describes the hierarchical nature of the cooperative structure. It presents the Supply chain linking farmer-suppliers of milk with the millions of consumers. HYDERBAD Cooperative Milk Marketing Federation or HCMMF is the marketing entity for the State of TELENGANA.

AMUL PATTERN

3 tier structure of Amul

1.Village Dairy Cooperative Society (VDCS)

The milk producers of a village, having surplus milk after own consumption, come together and form a Village Dairy

Cooperative Society (VDCS). The main functions of the VDCS are as follows:

Collection of surplus milk from the milk producers of the village & payment based on quality &

quantity

Providing support services to the members like Veterinary First Aid, Artificial Insemination

services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, conducting training on

Animal Husbandry & Dairying, etc.

Selling liquid milk for local consumers of the village

Supplying milk to the District Milk Union

Thus, the VDCS in an independent entity managed locally by the milk producers and assisted by the District Milk

Union

2.District Cooperative Milk Producers’ Union (Milk Union)

The Village Societies of a District having surplus milk after local sales come together and form a District Milk

Union. The main functions of the Milk Union are as follows:

Procurement of milk from the Village Dairy Societies of the District

Arranging transportation of raw milk from the VDCS to the Milk Union.

Establish Chilling Centres & Dairy Plants for processing the milk received from the villages.

Selling liquid milk & milk products within the District

Process milk into various milk & milk products as per the requirement of State Marketing Federation.

Decide on the prices of milk to be paid to milk producers as well on the prices of support services provided

to members.

3. State Cooperative Milk Federation (Federation)

The Milk Unions of a State are federated into a State Cooperative Milk Federation. The Federation is the

apex tier under the three-tier structure. The main functions of the Federation are as follows:

Marketing of milk & milk products processed / manufactured by Milk Unions.

Arranging transportation of milk & milk products from the Milk Unions to the market.

Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions.

Arranging for common purchase of raw materials used in manufacture / packaging of milk

products.

Decide on the prices of milk & milk products to be paid to Milk Unions.

STEPS INVOLVED IN SUPPLY CHAIN OF AMUL POUCH MILK:

A)Logistics in collection:

a)8.4 million liters of milk collected daily.Procurement Channel

Milking is done every morning and evening. On an average around 2.79 million milking farmers come to sell

milk at their local-co-operative milk collection centers.

Each farmer has been given a plastic card for identification.

In this whole process the time consumed is about 3-4 hrs.

b) 13,000 village co-operative societies.

Collection of surplus milk from the milk producers of the village and paying them on the basis of quality & quantity.

The Village Societies ( Milk Union in Gujarat) having surplus milk after local sales come together

and gives the surplus milk to District Milk Union.

At the milk collection counter , the farmer drops the card into the box and the identification

number is transmitted to a personal computer attached to the machine

The milk is then weighed and the fat content of the milk is measured by an electronic fat testing

machine.

Cow milk fat-3-4%

Buffalo milk fat -6-8%

Fat rate- Rs.350 per Kg

If the milk contains 6% then( for 1Kg 350* 0.06 =Rs.21)

Lesser the fat in the milk , lesser will be the price paid to them.

All the details are recorded in the computer. The computer then calculates the amount due to the

farmers on the basis of the fat content given above.

The value of the milk is then printed out on a slip and handed over to the farmers.

The time consumed in this whole process is 5-6 hrs

B) Logistics in co-ordination of-

a) Storing the milk in chillers

The milk is stored in large chilling centres of the village co-operative societies. Around 43 chilling centres.are present.

Then the milk is supplied to the 13 District Cooperative Milk Producers’ Union (Milk Union) through tanks

having capacity of about 20,000L .After the whole demand of 13 unions are fulfilled the surplus milk is

supplied to the Mother Dairy , Gandhinagar

The district Union supplying milk in the Ghazianad and Noida region is Sabarkantha Dairy, Himmatnagar.

b) Processing of the milk at the milk Union(Sabarkantha Dairy)

Milk Processing Chart: Collection of Raw-Milk Electronic Milk Test Methyline Blue Reduction Test Purchasing And Standardizing Process Separation Process Quality Check Packaging Process Cold Storage

Tankers are received at the reception Dock

Tankers are checked whether they are sealed properly or not and a small amount of sample is

taken for Quality check

If there is any quality deviation like acidity is above 0.135 and milk is adulterated with urea,

glucose, starch, vegetable oil then the whole tank is rejected .

1) After this further lab testing is done with the help of these two types of tests:

i)Electronic milk test

ii) Methyline blue reduction test

Electronic Milk Test : Before pasteurizing the milk the samples are taken to the laboratory.

In the laboratory with the help of machine called electronic milk tester, the proportion of

SNF & FAT is checked with phosphate solution. When the colour of the milk becomes

yellow, it is sent for pasteurisation.

Methyline blue reduction test: Another test, which is taken in the laboratory, is called

methyline blue reduction test.This test is conducted for checking for how long the milk will

remain fresh. To check this, 10 ml of milk is taken and 1 ml of methyline blue solution is

added to it. It is then kept under water at 57-degree C. After one hour, if the solution losses

its colour than it is called raw milk. If the solution remains the same even after 5 hours than

it is considered as fresh milk, which remains constant for a long period of time. The dairy

fixes the proportion of FAT & SAF.

MLK

FAT

SNF

Buffalo 6% 9% Cow 4.5% 4.5

%

After laboratory gives green signal and confirming the raw milk at the reception dock Gross

weight of the tankers are taken and then the tankers are unloaded and their tare weight (empty

weight) is taken.

Net weight of the milk received = Gross weight - Tare weight

Then the milk is brought in to the house connected with the pump is sent to the milk processing

plant for filtration.

This is than chilled below 4 degree C in chillers and then stored in milk silos.

After that milk is processed which has two steps i.e. pasteurizing and standardizing.

2. Pasteurizing & standardizing: After collecting and checking and conducting laboratory tests, the

pasteurizing process is conducted. To pasteurized the milk means to kill all the germs in the milk by a

particular method which was invented by a scientist called James Pasteur and so the name pasteurization.

In pasteurizing, the milk is first heated at 80C to 82 C for 30 seconds and then it is immediately cooled

below 4 C. By this method they destroy the pathogenic bacteria present in the raw milk. But if the right

degree of temperature is not provided there are chances that the milk might still contain germs.

After pasteurization the milk is again send to the chilling units (temp below 3 degrees) and then to

the pasteurized Milk tank.

After this process some milk goes to separator machine and remaining is proportionately sent for

standardization.

Diagrammatic representation of Pasteurizer milk process

Standardization process is known such as it bifurcates the milk in 3 categories varying according to

that FAT & SNF contents. The equipment named OSTA. Autostandardization adjusts the fat directly.

The computer is just ordered whether gold or ,Taaza milk is to be rationed and the same will be

received with appropriate contents.

Ready Milk = Pasteurised + Standardized.

3. Separation process:

Separator machine separates two kinds of products, skimmed milk & cream, through

channels. There are 100 disks fixed in separator machines, which revolve at 5000 rpm

(revolution per minute). It is taken to the tanks, which has the capacity of 20000 litres.

Whenever the milk is needed from the tank, it is tested in the laboratory and the deficit

proportion fat is added by mixing cream. This process continues for 24 hours.

4. Quality Check

Pasteurized milk is sent for a quality check in the Quality Assurance laboratory of the

dairy plant. Within 14 seconds FAT and SNF proportion is received

5. Packing Process

After this the milk is sent for packing to the milk packing station in the dairy plant.

At the milk packing station(Nagar dairy) this whole process of processing of milk is again

repeated .

In the milk packaging station there are huge pipelines and behind each of them there is polyfill

machine from which the material to pack milk comes out.

The pouches are kept in the crates and stored in the cold room stores.

6. Storage

Then the milk is sent to the cold storage of the dairy where the milk is stored until it is

dispatched.

Here the milk is stored at temperature ranging from 5 C to 10 C, it is

maintained with the help of exhaust fans having silicon chips.

The damaged pouches are kept a side and the milk is once again put to the tank.

In the cold room the crates are stacked on the lorry and brought to the dispatch dock . From the dock

they are loaded in the milk vans and finally dispatched to the distributers who supply it to the

retailers and then the milk finally reaches the customers.

7 .Distributing and marketing of milk BY HCMMF. The marketing and distribution of milk processed and manufactured by milk unions is done by GCMMF. Distributers supply it to the retailers and then the milk finally reaches the customers.

Arranges transportation of milk & milk products from the Milk Unions to the market.

HCMMF takes the daily demand from the distributers and accordingly inform it to the packing

plant(Nagar dairy)

A zero level of channel also called A direct marketing channel consists of a manufacturerselling directly to the final customers.

A one level channel; contains one selling intermediary such as retailer to the final customers.

A two level channel two intermediaries are typically wholesaler and retailer.

A three level channel are typically wholesaler, retailer and jobber in between.

HCMMF has an excellent distribution. It is its distribution channel, which has made it so

popular. HCMMF’s products like milk and milk products are perishable. It becomes that

much important for them to have a good distribution.

Distribution Chart of HCMMF:

• Milk

• ADA

• Wholesaler

• Retailer

• Customers

We can see from above figure that HCMMF distribution channel is simple and clear. The products change

hands for three times before it reaches to the final consumer. First of all the products are stored at the Agents

end who are mere facilitators in the network. Then the products are sold to wholesale dealers who then sell

to retailers and then the product finally reaches the consumers.

AMUL PARLORS

Amul has come out with a unique concept of Amul Parlors. They have classified them under four types namely:

· Center for excellence

· On the Move

· Amul Parlours

· Amul Preferred Outlets

1.Center for Excellence: These Amul Parlours are specifically at a place, which has a

class of excellence of its own. We can find such parlors at the Infosys, IIMA, NID

Ahmedabad etc.

2.On the Move: These parlors are at the railway stations and at different state bus depots

across different cities.

3.Amul Parlours: These parlors can be seen at different gardens across different cities.

These are fully owned by Amul.

Amul Preferred Outlets: These are the private shops that keep the entire of product

range of Amul. They also agree not to keep any competitor brands in the outlets. They

can keep other brands that are in the non-competitor category.

MARKET RESEARCH

DISTRIBUTERS SURVEY ANALYSIS ON AMUL POUCH MILK

This study attempts to find out the distributers supply chain of AMUL fresh milk to the retailers based on various key factors. The study was conducted as follows :

Sampling technique: Non- probability sampling

Sample Unit: Distributers who are selling fresh milk

Sample size: 20 respondents

Method: Direct interview and questionnaire

Data analysis method: Graphical method

Area of survey: Noida and Ghaziabad

Q1. Mode of transport from the plant.:

VEHICLE CAPACITY(in crates)

TATA 209 260

TATA 407 360

TATA 709 664

TATA 1109 900

INFERENCE:

Q2. Temperature of the milk at the time of delivery to the distributers:

INFERENCE: Average Temperature of the milk at the time of delivery to maximum no. of distributers is 7-9 degrees . This temperature is very close to the cold room storage temperature(6 degrees).

Q3. Time of delivery:

To the ADA:

To the retailers:

INFERENCE:

Among the 20 distributers surveyed it was found that the 12 distributers (ADA) receive the milk from the Plant in the morning between 1:00am-3:00am and 8 0f them receive the milk at around 3:00pm-5:00pm in the evening.

The morning supply reach the retailers between 3:00am-5:00am and evening supply reaches between 4:00pm-6:00pm.

RETAILER SURVEY ANALYSIS ON AMUL POUCH MILK

This study attempts to find out the retailers supply chain of AMUL fresh milk to the customers based on various key factors. The study was conducted as follows :

Sampling technique: Non- probability sampling

Sample Unit: Retailers/Wholesalers who are selling fresh milk

Sample size: 30 respondents

Method: Direct interview and questionnaire

Data analysis method: Graphical method

Area of survey: Noida and Ghaziabad

Q1. Milk storage capacity

INFERENCE

Among 30 retailers surveyed it was found that around 14 of them had the mik storage capacity of 720L(60 crates), 12 of them had around 480L(40 crates ) and 4 of them had 240L(20 crates) storage capacity

Q2. Time of delivery:

INFERENCE

The Retailers receive the milk from the ADA in the morning at at 5:30am and at around 4:00pm-6:00pm in the evening.Most of them were unsatisfied with the evening supply of milk.

Q3. Temperature of milk at the time of delivery to the retailers:

INFERENCE

Average Temperature of the milk at the time of delivery to maximum no. of retailers is 9-10 degrees . The quality of the milk does not get detoriated if milk is retained at this temperature even for two days.

Q4. Mode of delivery to the customers

INFERENCE

The survey conducted shows that every retailer delivers the milk packets at the door steps of the customers i.e the home delivery system through prepaid coupons or post paid coupons and approx 67% of their expected sales is through home delivery system and only 33% is by counter sales.

Q6 .Are you satisfied with the existing supply chain?

Inference

Most of the dealers (approx 90%) felt that AMUL’s existing supply chain is working very efficiently as they get timely supply of milk in the morning except in very rare cases. Approximately 80% were unsatisfied with the timings of the evening supply of milk.

CUSTOMERS SURVEY ANALYSIS ON AMUL POUCH MILK

This study attempts to find out that consumers perception and how they scale AMUL on various factors key factors.The study was conducted as follows:

Sampling technique: Non- probability sampling

Sample Unit: Customers who consume milk

Sample size: 40 respondents

Method: Direct interview and questionnaire

Data analysis method: Graphical method

Area of survey: Noida and Ghaziabad

Q1. No. of family members

INFERENCE

The survey results shows that no. of family members in the area surveyed are mostly 4 including the working couples and their children or in rare cases grandparents were also present.

Q2 Mode of delivery

INFERENCE

Among the customers surveyed most of the families had working parents of the age around 25-50 and so they preferred purchasing the milk through home delivery system i.e through prepaid coupons 23 and 12 through post paid coupons sand rest 5 of them brought through counter sales.

Q3. Time of purchase:

INFERENCE

Most of the customers (60%) preferred buying i.e through counter sales or getting the home delivery of milk in the morning between 6:00am -9:00am and in the evening (40%) between 6:00 pm -9:00 pm.

Q4. Temperature of the milk at the time of delivery to the customers.

INFERENCE

Average Temperature of the milk at the time of delivery to most of the customers is 10-14 degrees . The quality of the milk does not get detoriated if milk is retained at this temperature even for two days.

Q5.Quantity consumed daily

INFERENCE

The survey results shows that in majority of households about 2litres of milk is consumed daily. Milk is a commodity which is required on daily basis and so company must take more steps to enhance the sale of milk.

Q6.Type of milk you consume daily

INFERENCE

Out of the survey conducted it was found that around 12 customers prefer consuming toned milk,3 preferred double toned,25 preferred full cream and demand for standard milk is nil. The customers are mostly demand for full cream milk type.

MAJOR FINDINGS:

PLANT SURVEYFINDINGS:

Raw milk is received by the Nagar dairy from Himmatnagar-based Sabarkantha District Co-operative Milk

Producers’ Union Ltd

Turnover of the NAGAR plant 183 crores.

Total milk handling capacity -3.9 lakh litres

Distance of member union from Plant-1100km

Type of vehicle used for carrying milk- TATA 407,709,1109

Storage Temp of milk during transit-2.5 degrees

Average time of transit(union to plant) -30 hrs

Cold room capacity & storage temperature- 5lakh litres , 5-6 degrees

No. of vehicles being loaded at plant-

Average time of loading per vehicle-1-2 hrs.

Details of vehicle being loaded from the plant:

...

MACHINEY REQUIRED

a) Auxiliary equipments: -,

i) Milk tanks –

20-22 milk tanks come daily from Sabar Dairy

Milk handling capacity of each tank- 20,000L

ii) Feed milk pumps – for filtering milk

b) Equipment for processing:

VEHICLE CAPACITY(in crates)

TATA 209 260

TATA 407 360

TATA 709 664

TATA 1109 900

TATA 25-15 1500

i) Plate heat exchangers for milk,

ii) HTST pasteurizers for milk,

Pasteurization time 30seconds

Pasteurization temperature 80-82 degrees

c) Instant Milk Chilling Unit,

2 chillers

Chilling capacity of 1st chiller- 10,000L/Hr

Chilling capacity of 2nd chiller-20,000L/Hr

Temperature of the chiller 3 degrees

d) Milk silo – for storage

Milk handling capacity of each silo- 50,000L

Temprature of the Silo- 3 degrees

e) Milk packing machine

12 machines

Each machine has 2 heads

From 1 head comes out -45 pouches/min

Total no. of pouches produced daily- 70,000

Daily dispatch of various types of milk from the plant.

Type of milk Volume in litres

Amul Gold(full cream) 2,30,000

Amul Taaza(toned milk) 1,90,000

Amul slim $ trim(double toned milk) 18,000

ADA (Area delivery agent )Survey:A Survey was conducted on the supply chain of AMUL pouch milk in certain sectors of HYDERBADFINDINGS.

Milk in this area is comes to the distributers from the Nagar Dairy,Hapur Temperature of the milk at the time of delivery to maximum no. of wholesalers is 7-9 degrees It was found that the 60% of the distributers (ADA) receive the milk from the Plant in the morning

between 1:00am-3:00am and 40% of them receive the milk at around 3:00pm-5:00pm in the evening.

The morning supply reach the retailers between 3:00am-5:00am and evening supply reaches between 4:00pm-6:00pm.

Expected sales of the ADA is ranging between 400crates-1400 crates.

Retailers Survey:

A Survey was conducted on the supply chain of AMUL pouch milk in certain sectors .

FINDINGS:

Retailers store the milk crates outside their shops or the APO .It was found that around 47% of the retailers had the milk storage capacity of 720L(60 crates)

Expected sales of the retailers was around 30-40 crates. The Retailers receive the milk from the ADA in the morning at at 5:30am and at around 4:00pm-6:00pm in

the evening .Most of them were unsatisfied with the evening supply of milk. Most of them were of the opinion that timely supply and distribution channel are the two main things which affect the sales of milk .Distribution channel efficiency plays an important role in maintaining the stocks and delivering it to the customers.

Average Temperature of the milk at the time of delivery to maximum no. of retailers is 9-10 degrees. Approx 67% of their expected sales of the retailers is through home delivery system and only 33% is by

counter sales.

Customers Survey:

A Survey was conducted on the supply chain of AMUL pouch milk in certain sectors .

FINDINGS:

Respondents surveyed were in between the age of 20-50 years and had mostly 4 family members including the working couples and their children or in rare cases grandparents were also present.

In the survey majority of the contribution was made by the housewives and professionals. Approximately 87.5% of customers surveyed preferred purchasing the milk (which is a daily

necessity in every household) through home delivery system i.e the prepaid coupons and post paid coupons rather than purchasing the milk on the counter(only 23.5% of the customers)

Most of the customers (60%) preferred buying or getting the home delivery of milk in the morning between 6:00am -9:00am and in the evening (40%) between 6:00 pm -9:00 pm.

Average Temperature of the milk at the time of delivery to 47.5% of the customers is 10-14 degrees . During summers Approx. 15% of the customers are receiving the milk above 16 degrees and have complain regarding the curdling of milk.

In Majority of households about 2litres of milk is consumed daily It was found that around 30% of the customers prefer consuming toned milk, only 7.5% preferred

double toned, 62.5% preferred full cream and demand for standard milk is nil. Consumers prefer buying toned milk for their own consumption and for their children, and for making ghee and curd they mostly prefer full cream.

Curd available is a bit loose when made by the toned and double toned milk.

Temprature loss Temprature gain

During the supply between farmers and village co-operative society

27 degrees

During the supply between village co-operative society and union

7 degrees

During the supply between union and plant

3 degrees

During the supply between distributers

3 degrees

During the supply between dustributers and retailers

1 degrees

During the supply between retailers and customers

Approx. 2 degrees

During this whole channel the temprature maintainance is the most important factor to maintain the quality of milk and prevent bacterial growth (higher the temprature more the bacterial growth.) Proper care should be taken, specially regarding the temprature gain between the retailers and the customers .

Time in hours

Time taken by farmers for milking 4hrs

Kept in chilling centres at VCS 6 hrs

Milk Processing at the Union 18-20 hrs

Time taken to reach the NagarPlant 30 hrs

Milk Processing at the plant 12 hrs

Time taken to reach the distributers 2hrs

Time taken to reach the retailers 2 hrs

Total time taken in the milk procurement channel in the NOIDA AND GHAZIABAD region is around 72-76hrs or around 3days.

SUGGESTIONS AND FEEDBACK:

Temperature maintenance at all levels of supply chain is a must ,in order to maintain the quality of milk ,

specially between retailers and customers ,where there is maximum temperature loss

Measures must be taken to minimize the temperature loss between ,the distributers and the plant and for

this purpose the insulation of TATA ACE must take care of, and the retailers should have proper

refrigeration facilities.

There must be greater retailers and distributers co-ordination and integration ,as some of the retailers

were of the opinion that the behavior of distributers towards them were not up to the mark.

Retailers must get better understanding of customers needs and demands. Along with the milk ,HCMMF

must also pay heed to availability of other products of Amul at the Amul parlors.

In order to increase the sale of milk in NCR region, the supply of milk to the distributers must be increased,

as the retailers were having the storage capacity much more than their expected sales.

The plant ser milk timely in the evening.